The claimant, who was born on September 16, 1945, applied for disabled
child's benefits in May 1978. To become entitled to those benefits, the
claimant had to be under a disability which began before she attained age
22 and which did not end before the period covered by her application.
"Disability" is defined in the Social Security Act, in pertinent part, as
the inability to engage in any substantial gainful activity (SGA) by
reason of any medically determinable physical or mental impairment. The
evidence of record showed that the claimant had worked in a department
store during parts of 1972, 1973, and 1974. In determining whether this
work constituted SGA, an administrative law judge (ALJ) averaged the
claimant's earnings for each year she had worked at the department store
only for the months she had worked in that year. Using this method, the
claimant's average monthly earnings in those years exceeded the earnings
guidelines established by regulations that ordinarily show the employee
engaged in SGA. Given this evidence, along with evidence of the claimant's
satisfactory work performance, the ALJ found that the claimant had engaged
in SGA during her period of alleged disability and denied her application.
The ALJ's decision was affirmed by the Appeals Council. On appeal to the
district court which denied the claimant's benefits, the claimant
contended that her earnings for each year she had worked at the department
store should have been averaged over the 12 months of that year. Using the
claimant's method, her earnings for the years in question would not have
shown that she engaged in SGA. On appeal to the circuit court, the court
found that the regulations support the Secretary's method of computing
average earnings, i.e., the earnings be averaged over only the months
worked. Although the claimant also contended that her work at the
department store should not be considered SGA because she took the job
against her doctor's advice, worked for relatively short periods,
interrupted her employment to obtain medical treatment, and was terminated
for health reasons, the evidence showed that the claimant's job
performance was average to above average and that her termination was due
solely to lack of work. In affirming the denial of the claimant's
application, the court of appeals held that the claimant's
employment at the department store, along with the evidence of her
satisfactory work performance, showed that she had engaged in SGA.

LAY, Chief Judge:

On May 17, 1978, Mary Jo Anderson (plaintiff) applied for disabled child
benefits under Title II of the Social Security Act, 42 U.S.C. §§ 401-433
(1976 & Supp. V 1981).[1]
Ms. Anderson's application was denied throughout the administrative appeal
process. Thereafter, she sought judicial review of the denial. On July 13,
1981, the district court, the Honorable Edward J. McManus presiding,
remanded the case to the Social Security Administration for further
consideration. On October 23, 1981, a new hearing was provided before an
Administrative Law Judge (ALJ). The ALJ recommended denial of benefits;
the Social Security Appeal's Council adopted the ALJ's decision. Ms.
Anderson again appealed to the district court; the court found that
substantial evidence on the record as a whole existed to support the
determination to deny benefits. This appeal followed.

Mary Jo Anderson was born on September 16, 1945. Since an undetermined
date, Ms. Anderson has suffered from chronic undifferentiated
schizophrenia with paranoia. She has always resided at her parent's home
and is currently receiving Supplemental Security Income
benefits.[2] Ms. Anderson has
worked at two jobs relevant to this appeal: as a sales clerk in
Armstrong's Department Store in Cedar Rapids, Iowa; and then as a
clerk-typist for Iowa Electric Light and Power Company.

To be eligible for disabled child benefits, a claimant must prove that he
or she is under a disability that began before age 22 and existed at the
time of the claimant's application for benefits. 42 U.S.C. §
402(d)(1)(B)(ii). A claimant is "under a disability" if the claimant is
unable to engage in substantial gainful activity by reason of any
medically determinable mental or physical impairment that has lasted or
can be expected to last for 12 months or more. 42 U.S.C. § 423(d)(1)(A).
The disability must be continuous from before age 22 until the claimant's
application. Futernick v. Richardson, 484 F.2d 647, 648 (6th Cir.
1973). Thus, if Ms. Anderson at any time since her 22nd birthday has
engaged in substantial gainful activity, she is not disabled within the
meaning of the statute and is not entitled to disabled child
benefits.[3]

[Excess Earnings]

The regulations covering disability benefits provide that if the
applicant's "earnings averaged more than $200 a month in calendar years
prior to 1976" and "more than $230 a month in calendar year 1976" the
Secretary will consider the applicant to have engaged in substantial
gainful activity. 20 C.F.R. § 404.1574(b)(2)(i) & (ii) (1982). This
presumption may be rebutted by evidence of the nature of the applicant's
work, the adequacy of the applicant's performance, and the time the
applicant spent in work. 20 C.F.R. § 404.1573 (1982).

The ALJ found that while at Armstrong's, Ms. Anderson earned $705.03
during the two and one half months worked in 1972; $1,838.67 during the
seven months worked in 1973; and $2,062.84 during the five months worked
in 1974. During Ms. Anderson's employment at Iowa Electric, she earned
$3,962.85 in 1975 for eight months of work and $4,826.42 in 1976 for
eleven months of work. Both the ALJ and the district court averaged Ms.
Anderson's earnings for a given year over the months worked in that
year. Using this method, Ms. Anderson's earnings at Armstrong's each year
exceeded the amounts that create a presumption of substantial gainful
activity. Given this presumption and the evidence of Ms. Anderson's
satisfactory work record, the ALJ concluded that Ms. Anderson had engaged
in substantial gainful activity during her period of claimed disability.
On appeal, Ms. Anderson challenges the ALJ's method of computing her
average earnings. Ms. Anderson contends that the total earnings for each
year should have been averaged over the full calendar year of 12 months.
Using this method, Ms. Anderson's earnings at Armstrong's would not create
a presumption of substantial gainful
activity.[4]

The Secretary argues that the regulation requires that the applicant's
earnings be averaged over only the months worked. We recognize that an
agency's interpretation of its own regulation should be followed unless
there are compelling indications that it is wrong. E. I. duPont de
Nemours Co. v. Collins, 432 U.S. 46, 56 (1977). There is no available
legislative history to guide us in the interpretation of the relevant
regulations. However, a careful reading of the regulations leads us to
agree with the Secretary's method of computing average earnings.

The applicable regulation provides: "The work that you have done during
any period in which you believe you are disabled may show that you are
able to do work at the substantial gainful activity level. If you are able
to engage in substantial gainful activity, we will find that you are not
disabled." 20 C.F.R. § 404.1571 (1982). Under the regulation, a
determination that an applicant has in the past engaged in substantial
gainful activity does not purport to be a determination that the applicant
is now or ever has been capable of maintaining this level of
financial support. Instead, it is a determination that, for a specific
time during the period in which the applicant claims to have been
disabled, the applicant was able to engage in substantial gainful activity
and thus was not, during that time, continuously disabled. Because
an applicant is required to show that he or she was continuously disabled,
a determination that the applicant engaged in substantial gainful activity
defeats the claim for benefits.

A proper reading of the regulation requires that the decision maker
average the wages earned by the applicant over the time employed to
determine whether during that time the applicant was capable of
substantial gainful activity. This method of averaging gives a truer
reading of the applicant's capabilities. The plaintiff's method of
averaging her wages received during a calendar year over all the months in
that year, whether plaintiff was employed during those months or not,
circumvents the purpose for determining whether an applicant engaged in
substantial gainful activity. A determination of average earnings using
the plaintiff's method would not tell us whether an applicant was
"capable" of substantial gainful activity but whether the applicant was
capable of earning, for that year, a substantial
income.[5]

We also note that the regulation is written in terms of "earnings
averaged more than $200 a month." If plaintiff were correct in her
assertion that an applicant's earnings always should be averaged over a 12
month period, the regulation more logically would be written in terms of a
yearly minimum, not a monthly minimum. See, e.g., 5 C.F.R. §
595.105(b) (1983) ("$7,000 per annum" limit on comparability allowance
payable to Government physicians); 20 C.F.R. § 416.1161(c) (1983) (child's
earned income excluded up to "$1,620 per year" if child is student); 20
C.F.R. § 676.261(c)(2)(i) (1983) (wages for any Public Service Employment
participant limited to "$10,000 per year" from CETA funds). Thus, for this
court to give meaning to the terms and the method of phrasing used in the
regulation, we must agree with the Secretary's interpretation of the
proper method for computing average earnings.

We are not indifferent to Ms. Anderson's argument that under our method
of determining average income disabled persons might be dissuaded from
even attempting to work out of fear of being able to work only long enough
to lose their eligibility for disability benefits. However, we point out
that the determination that an applicant meets the threshold income level
is only one factor in determining whether an applicant was capable of
substantial gainful activity. As we have discussed, the decision maker is
required to take into account other factors. See supra p. 3. Thus,
persons who courageously attempt to enter the workforce and who must end
their efforts because of their disability need not fear automatic
exclusion from receipt of disability benefits. See, e.g., Chicager v.
Califano, 574 F.2d 161 (3d Cir. 1978); Cornett v. Califano, 590
F.2d 91 (4th Cir. 1978); Hanes v. Celebrezze, 337 F.2d 209 (4th
Cir. 1964).

[Presumption Unrebutted]

Because we affirm the ALJ's determination that Ms. Anderson's earnings at
Armstrong's created a presumption that she engaged in substantial gainful
activity, we now must review the conclusion that this presumption was not
rebutted by the evidence presented by Ms. Anderson. The plaintiff
presented evidence that during her employment at Armstrong's she worked
for three relatively short periods (several months each), that she needed
to interrupt her employment to obtain medical treatment, and that she took
the job against her doctor's advice. Plaintiff alleged that in January of
1973 she was terminated because of her health problems. Plaintiff contends
that this evidence combined with the erratic nature of her illness, that
is, symptom-free periods followed abruptly by acute phases of the illness,
support her assertion that the work she performed at Armstrong's should
not be considered substantial gainful activity.

The Secretary presented evidence that Ms. Anderson's supervisors
considered her job performance average to above average. They testified
that she was able to perform the duties assigned to her and that she did
not have to be more closely supervised than any other employee. Ms.
Anderson's supervisors also stated that she was terminated in January of
1973 due to lack of work during the non-holiday season and had the
termination been for any other reason she would not have been rehired, as
she was, in April of the same year. From this evidence, the ALJ and the
district court found that Ms. Anderson did not meet her burden of proving
that she was disabled continuously from her 22nd birthday until she filed
for disabled child benefits.

We also conclude that Ms. Anderson did not meet her burden of proof.
Although conflicts in the evidence exist as to plaintiff's ability to
perform substantial gainful activity, such conflicts are to be resolved by
the administrative decision maker, not the courts. While Ms. Anderson
clearly has a serious and debilitating illness, testimony from her
supervisors and fellow employees provides adequate evidence to support the
conclusion that the work she performed at Armstrong's was both substantial
and gainful.[6] We, therefore,
agree with the ALJ's determination that Ms. Anderson's employment created
a presumption that she was engaged in substantial gainful activity. We
also conclude that substantial evidence shows that Ms. Anderson did not
rebut this presumption. We, therefore, affirm the district court in its
denial of benefits to Ms. Anderson.

[1] Ms. Anderson earlier had
filed another application that was denied and that has no bearing on this
case.

[2] Ms. Anderson seeks disabled
child benefits because the amount received under those benefits is
appreciably greater than that received under Supplemental Income
benefits.

[3] Because we find that Ms.
Anderson engaged in substantial gainful activity, and is ineligible for
benefits on this ground, we do not need to address the question of whether
or not Ms. Anderson's disability began before the age of 22.

[4] Using the plaintiff's
proposed method of averaging, her earnings at Iowa Electric indicate that
she engaged in substantial gainful activity. However, the ALJ found that
other factors such as Ms. Anderson's health problems and her absentee
record may have rebutted the presumption created by her earnings. Because
the ALJ found that Ms. Anderson's work at Armstrong's indicated that she
engaged in substantial gainful activity, he did not rely on Ms. Anderson's
work at Iowa Electric in his decision to deny benefit. Because we agree
with the ALJ's evaluation of Ms. Anderson's work at Armstrong's, we also
do not need to evaluate her work at Iowa Electric.

[5] The court does not wish to
imply that the income levels set by the Secretary for presuming the
ability to engage in substantial gainful activity are "substantial" in the
usual meaning of the term. However, earnings meeting the level of the
regulation more equitably are augmented by Supplemental Security Income
payments such as plaintiff is now receiving than by disability payments
such as plaintiff is seeking.

[6] The regulations define
"substantial work activity" as work "that involves doing significant
physical or mental activities" and "gainful work activity" as work that is
done "for pay or profit." 20 C.F.R. § 404.1572(a) & (b) (1982).

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